Sofia, 2 July 1997 (RFE/RL) -- A Bulgarian state-run arms manufacturer and Sofia's trade ministry deny any wrongdoing in an alleged attempt by two Lithuanian nationals to sell surface-to-air missiles (SAMs) to undercover U.S. agents.

The two men were arrested in Florida last week by the U.S. agents, who were posing as brokers for a Colombian drug cartel. Court records in the United States say Bulgaria's state-owned "Armimex" was to serve as the supplier of the missiles.

Bulgaria's trade ministry admitted to RFE/RL late yesterday that a U.S. firm called "Phoenix Arms International" had been given permission on Dec. 16, 1996 to purchase weapons from Armimex. The ministry says one of the two suspects arrested in Florida last week, Aleksandr Darichev, was a representative for Phoenix Arms International. Sofia says the deal did not go through because payments were never made.

Armimex chief Ivan Damianov told reporters that Darichev's firm had presented an arms dealer's license purportedly issued by the U.S government along with a certificate allegedly issued by the Lithuanian Defense Ministry. Damianov said the certificate claimed that the weapons would be used by the Lithuanian military and would not be re-exported to a third party. Sofia is now distancing itself from the deal by saying that Darichev would have exceeded his authority by selling the weapons elsewhere.

But U.S. authorities say the initial documents are believed to be fake. Washington is questioning the ease with which two unknown men were able to obtain permission from Sofia to purchase weapons.

Further highlighting Sofia's apparent lack of background checks in weapons deals, an inspector at Interpol's Lithuanian bureau, Arunas Rakauskas, said today that the second suspect arrested in the case, Alexander Pogrebezhski, is wanted in Vilnius for fraud in connection with large-scale property seizures.

Lithuanian Deputy Defense Minister Edmundas Simonaitis told RFE/RL today that Phoenix Arms International had offered last year to serve as an intermediary for Vilnius in weapons deals. But Simonaitis said no evidence has been found that defense officials from Lithuania's previous government had accepted the offer.

According to an affidavit filed in U.S. District Court, Darichev and Pogrebezhski were arrested after allegedly negotiating a $1.3 million deal in which 40 surface-to-air missiles were to be smuggled from Bulgaria to Puerto Rico by a Cypriot cargo ship. In the court documents, the U.S. agents said they also talked to a man named "Anthony" who was purported to be a broker for Bulgaria's Armimex.

Armimex is the successor of a former specialized arms trading department of Bulgaria's Ministry of Defense. Besides its business as an exporter of Bulgarian-made weapons, it also is the principle importer of Russian arms to Bulgaria.

The arrested men allegedly worked for two years to put the deal together with the undercover U.S. agents. No weapons were delivered, but a spokesman from the U.S. Customs Service said federal investigators think the men had access to the arms. Court records say the two men also offered materials for nuclear weapons to the undercover agents. U.S. authorities are continuing their investigation.

Prime Minister Ivan Kostov today said that a full investigation also is being launched in Bulgaria.

(Petko Georgiev of the Bulgarian Service and Kestutis Girnius of the Lithuanian Service contributed to this report.)